JLR Profits Plunge on Asset Writedowns

Jaguar Land Rover Ltd. reports that its unit sales, revenue, earnings, operating margin and net profit all shrank in the fiscal third quarter ended Dec. 31.

Retail sales in the October-December period for the British luxury car maker declined 6% to 144,600 units, pulled down by slumping demand in China. Revenue dipped 1% to £6.2 billion ($8.1 billion).

Earnings, already in negative territory, took a massive hit because of a £3.1 billion writedown of assets. JLR’s net loss for the period surged to £3.4 billion ($4.4 billion), reversing last year’s £88 million profit. It was the company’s third consecutive quarter of red ink.

Quarterly operating profits swung to a negative £159 million ($206 million) from a year-earlier positive £164 million. The margin on earnings before interest, tax, depreciation and amortization dropped to 7.3% from 10.9% a year earlier.

JLR, which is owned by India’s Tata Motors Ltd., has been buffeted by shrinking demand for its diesel-powered models, worries about the impact of the U.K. leaving the European Union and the impact of the U.S.-China trade war.

The company has launched a major restructuring that aims to slash annual costs by 2.5 billion ($1.3 billion) in 18 months, including the elimination of 4,500 jobs in England.